Answer each of the following questions by supporting your work with a properly labeled graphs that reflect your calculations.

Given that land available for the project in Muscat is in fixed supply of 30000 square meters, and the demand for land is= 100000 10if the price of land is measured in dollars too:

1. What is the amount of budgetary expenditure that shall be allocated to the project?
2. Show how shadow pricing may account for the divergence between budgetary expenditures and true social costs in this case.